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Monday, 7 May 2018

Final vote on Ride-Hailing Apps Act postponed in House on account of controversial clauses

LEGISLATION WATCH- Final House vote on Ride-Hailing Apps Act postponed amid backlash against data-sharing clauses: The Ride-Hailing Apps Act failed to breeze through a final vote in the House of Representatives yesterday, drawing heavy criticism for some of its most controversial clauses, which appear to not have been amended at all. Articles 9 and 10 of the legislation, which mandate that ride-hailing companies store user data on their servers abroad for a period of 180 days and make information accessible to government agencies, appear to still be in the bill, according to a leaked copy released by Al Shorouk. MPs voted to study the two articles, which raised the most stink from Uber and Careem, and postpone the vote on them. Earlier reports had indicated that a House subcommittee charged with reviewing the act had agreed to do away with these clauses, which the Egyptian Council of State (Maglis El Dawla) itself had ruled were unconstitutional.

The House also postponed a vote on Article 5 of the law, which sets a cap on licensing fees for ride-hailing companies. Transportation Minister Hisham Arafat had requested that licensing fees for companies in the law be capped at EGP 10 mn.

A law less than ideal for ride-hailing companies: Based on our reading of the law, multiple provisions that came under fire from Uber and Careem remain in place. Among the most glaring:

  • Forcing ride-hailing companies to develop a system to integrate white taxis into their fleets, something which the Council of State had deemed unconstitutional.
  • Special licensing fees for drivers that are likely to be more expensive than those for taxi drivers.
  • Forcing drivers to have stickers marking their association with a particular company.
  • Setting a fine of between EGP 200k and EGP 5 mn for violators of the act.
  • Ride-hailing companies have only six months to comply with the law.

Are tuk-tuks covered by the law? House Speaker Ali Abdel Aal reportedly said that the law would not govern tuk-tuks. But the act clearly says that the law would apply to “land vehicles and mass transit.” While seemingly a simple discussion, this point could potentially impact numerous new services that do not use traditional passenger cars. Halan, a new ride-hailing app targeting motorcycle and tuktuk owners, had launched in January and has already raised more than 75% of the USD 2 mn it is looking to land for its pre-series A. Uber already runs its Uber Scooter service.

Tic toc: The Supreme Administrative Court is scheduled to hear on Saturday, 12 May an appeal by Uber and Careem of a lower court decision that ordered the two companies to suspend operations, Al Mal reports. The two companies continue to operate under a Court of Urgent Matters ruling that stayed the initial suspension.

Uber, Careem to update Google Maps’ GPS? On a related note, the House Transport and ICT committees reportedly reached an agreement with Uber and Careem that will see the two ride-hailing companies provide Google with an updated and more detailed map of the Cairo governorate once the Ride-Hailing Apps Act is signed into law, unidentified sources tell Al Mal. The two companies will connect the data with Google’s GPS service, which MPs say currently lack many streets’ names. The process should not take longer than one year, the sources say, and the details of the partnership will be announced at the end of the month. It remains unclear whether Google had any role in the “agreement” — or, indeed, is even aware of it.

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